It may seem like a very simple question, but the answer can be complicated when it comes to umbrellas and insurance.Operating an Umbrella in a rainstorm is simple and straightforward, but understanding Umbrella insurance, is a little more challenging and confusing. We’re here to help. 
On your homeowners, renters, and car insurance policies there is liability protection built into the policies. In those cases, if you have a $1,000,000 Umbrella policy, then you definitely have $1,000,000 of extra liability coverage. Where the disconnect occurs is that Umbrella policies do not provide extra coverage to your property – not your home, your belongings, or your vehicle. So, if you have a fire in your home, and the cost exceeds the cap on your policy, your Umbrella policy does not provide extra coverage or limit to tap into. An Umbrella policy is a personal liability policy increasing your limits above your basic home, renters, and auto policy and that’s it. 
Why purchase an Umbrella policy? The higher limits of liability insurance provided by an Umbrella policy are very important to those with assets to protect as well as those with future earnings to protect. For example, if you are a homeowner with equity in your home with savings and investments, and you want to protect yourself from being liable for damage or injury to others. It’s essential that you buy an Umbrella policy. But what if you are just starting your career and have nothing to your name? You may still want to consider buying an Umbrella because if you cause significant damage or injury, the courts have attached to future earnings of an individual that is liable for bodily injury or property damage. 
When speaking with new prospective clients, we find that most believe that an Umbrella policy covers them for every eventual outcome. While this is not the case, having an Umbrella insurance policy is much like having an Umbrella in heavy rain.
It’s a lot better to have one! 
